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9/16/2011 3:27PM

Birmingham, Ala. Escapes Bankruptcy

Officials in Jefferson County, Alabama have approved the framework for the settlement of $3.1 billion in debt settlement rather than file for a record bankruptcy. Michael Corkery stops by Mean Street to explain.

This transcript has been automatically generated and may not be 100% accurate.

... Gers I ... line Alabama expert into ... Michael Corkery here ... they are being held ... you know good Alabama ... titles ... and tells what was the collegiate today as I understand me just briefly recap for viewers ... they can get all this money to build a sewer system we can make the payments on it ... and then debase the becomesthe a gunfight ... between Wall Street represented by J P Morgan and Mean Street ... represented by the City Council Birmingham ... the daughter of Jefferson County ... over who pays what can these bankruptcy is that we're about to basically throwing a little corruption ... my dad you've got ... you've got the story I guess it today DVD ... after about three years of on off negotiations taking to the green and red ... eyed and it's a it's quite a whopper ... during this and said ... the winner when it really mean Street main Street history beans waltz transfer while Alper wants to be the ... big acts that concessions ... to take the debt of about three billion dollars ... down from a team severe haircut of about billion dollars ... has never been that big of a haircut in a municipal enemy Ms Christine useful bonds in restructuring practice ... and and how they did it was a threat to declare bankruptcy right ... what what what JPMorgan's think the and declarer Beckett's who we get ... a couple things one ... JPMorgan doesn't want to go down in history ... as you think you know the Jenny's daughter wants to be on the evening news ... talk about how he had yet to show that given Jefferson County lesson does and does this bill ... that is within the largest U S municipal bankruptcy in history ... JPMorgan and then on to the big ten biggest insurers and the need to address its huge delights of wood and a lot of money ... I and and a lot of the discipline seems ... so that's one thing is just a PR that one in the other is that they know they've ... been written down on its debt and that you know they would rather take the chances of the deal as painful as it was to try to get it that this this this month's months ideas ... as a victory for Main Street are represented by me ... is the citizens in Jefferson County ... Commission question what does this and then precedent your own muni bond holder ... next hot water in the hope was won in these municipalities that you can just play hard ball whenever it comes to paying back their loans in control and it's great question I mean ... I've ... been a safe haven Jefferson County they held out for more and more concessions ... that beat the peak of the vote on this instead of one or both he didn't declare bankruptcy ... or to commit deal three times in the past two months of the temple the same ... token if you will get a better deal with and need to be ... getting more more I think ... if you're sitting or or some type of municipality that has troubled Brett ... by which the same thing out now what ... what ... just county and ways ... they can declare bankruptcy brought in a lot of places you can pay rises are not allowed to quit ... the example we talk about just last week Harrisburg ... City in Harrisburg Pennsylvania which which cannot repay the loans unrelated to ... the garbage energy conversion plant that we talked about ... could have been declared bankruptcy bill that as the dollar's attention to detail that this state ... passed a law and use it said Kasper UTA declared bankruptcy ... it took just two away from them ... and and and some there would say as a result of the fact the king declared bankruptcy ... it had to go and consider selling assets leasing and says anything write to Peter debtors' is they don't have the same powers Jefferson county's teens when his has long ... standing there were long ... reaching far reaching ... impact on the muni bond market going forward and it is like a one off that were not even talking about a couple weeks ... you know people will continue Cointreau would like to date they say that some one off it was corrupted ... that's another thing to you know JPMorgan felt some compulsion to to do something here as ... the semester said Larry we are outside the control of the county itself right ... but I'd I think there's been so few of these cases that I'm that this this could be some people are going ... and could be a model to negotiate hard and play hardball with with Wall Street that doesn't want a bankruptcy will build you what they can to avoid final question ... will Jamie diming be going home tonight ... having the usual Scotch ... and listening to Limited skidded sweet home Alabama would begin to put limits geared album away for the